...We were told that the financial giants, most prominently Goldman Sachs and JP Morgan, were "too big to fail." We were given the same slippery justifications in diverting TARP funds beyond their original intent--moving into auto companies and heavy-handed neo-industrial policy. Yet in communities across America, bank regulators are busily shutting down banks that were "too small to succeed." The disconnect turns to frustration as bailed-out firms Goldman Sachs and JP Morgan announce record profits, while the community bank closes its doors.
With risk aversion preventing small businesses from accessing capital, job losses continue to mount and the engines of economic growth continue to stall. Small firms have to file for real bankruptcy--not the bailout bankruptcy afforded to AIG, Bank of America, GM, Chrysler and others.
Washington is working hard to nationalize other sectors of our economy too. The House Finance Committee is pushing a massive financial "reform" bill, effectively creating banking utility companies. The Treasury Department has effectively nationalized the housing finance sector, with Fannie Mae & Freddie Mac demonstrating how fast big businesses, through a federally blessed and backed oligopoly, can fall. Now, on both ends of Pennsylvania Avenue, health care and energy lobbyists continue to fall over themselves to cut their deals--knowing that if they aren't at the table, they'll be on the menu.He's been reading Tim Carney........and Luigi Zingales (see below).
To be clear, the federal government should not stack the deck against big businesses either. The government does not have a stake in the fight between David and Goliath--our only concern is to make certain that it is a fair fight. The government today is far from an unbiased arbitrator, and it is smothering dreams and stifling growth.
...For every encroachment into the market by the federal government--under the guise of "reform"--there exist pro-market alternatives that Republicans must articulate and passionately defend. University of Chicago's Luigi Zingales, who has written extensively on the issue of crony capitalism, reminds policymakers that the path forward requires “adopting a pro-market, rather than pro-business, approach.” We must champion an aggressive reform agenda to tackle our outdated financial regulatory structure, the convoluted and anti-competitive tax code, and the looming entitlement crisis, and to fix what's broken in health care, energy, and more. We should focus on removing the hurdles the government has erected, rather than further centralizing power in Washington. The legislative reform must focus on empowering individuals instead of bureaucrats.
Go, Paul, Go!!!